Slovenians were able to pay for their morning bread rolls and coffee with euros yesterday after the former Communist country switched to Europe's single currency.
„The initial indication is that everything went well in Slovenia, with people being able to withdraw their first euro cash from the banks' Automated Teller Machines,” said a statement e-mailed yesterday from the European Commission. Euro coins and banknotes became legal tender at midnight as fireworks exploded over the capital Ljubljana and citizens lined up for their first euros at cash machines.
A third of ATMs were operating at midnight, with the rest working again by 6 a.m. after a three-hour shutdown to adapt them to the changes. The first real test will come on Wednesday, January 3, when bank branches and shops open again after national holidays, although the tolar will continue to be legal tender alongside the euro until January 14. „This is something special for Slovenia,” said Brane Ban, a 58-years old information technology specialist as he lined up at a cash machine minutes after midnight.
„I was actually very happy with the tolar, since it was a pretty stable currency, although I am sure we will trust the euro the same as it's the currency that more than 300 million people use now.” Slovenia is the first of the 10 European Union members that joined in May 2004 to adopt Europe's common currency, switching at an exchange rate of 239.60 tolars per euro. Being the first is „testimony to the stability-oriented policies pursued by the Government,” said the European Commission's statement.
Slovenia, a former Yugoslav republic of 2 million, bordering Italy, Austria, Hungary and Croatia, became an EU member along with seven central and eastern European countries, as well as Cyprus and Malta. The nation managed to keep a lid on inflation, government spending and debt and fulfill the economic test for euro adoption, becoming the first new participant in the currency since Greece in 2001. „The Slovenian economy has had among the highest growth in history, the lowest unemployment, and we have tamed inflation,” said Prime Minister Janez Jansa in a New Year greeting sent by e-mail on December 29.
Slovenia's 34 billion economy grew 5.6% in the Q3, inflation for December was 2.8%, up from 2.3% a month before, and its unemployment rate for December was 8.9%, compared with 10.2% a year before. „We are saying goodbye to a very good currency, that was the tolar, and now we are introducing also a very good, probably an even better, currency,” Mitja Gaspari, Slovenia's central bank governor, told reporters at the central bank just after midnight, when he also exchanged tolars for euros.
Banks are well prepared for the switchover and many banks will have branches open for four hours in 43 cities the first two days of the year, which are national holidays, just for providing euros, said Gaspari. „I would like to reiterate once more, that we have enough euro cash to handle any possible mix-up,” Gaspari said. „At the moment we have in circulation around 215 billion tolars or an equivalent of around €1 billion, while we have ordered €2 billion for the new period.
People will be able to exchange any remaining tolar coins at the central bank until the end of 2016, while there is no limit for the exchange of banknotes. Gaspari, who was re-nominated by President Janez Drnovsek for another six-year term, becomes a member of the European Central Bank's governing council. „The role of the central bank will obviously become a bit different and you have to be aware that decisions of the European Central Bank affect more than 300 million people, probably much more,” Gaspari said on December 29.
Slovenian consumers had the first opportunity to see the new euro coins two weeks ago, when commercial banks and the central bank began selling kits of new €44 coins, minted in Finland, with typical Slovenian motifs. On the back of the €2 coin is the face of the national poet France Preseren and the highest mountain in the country, Triglav, is on the 50 cent coins.
The kit costs 3000 tolars or €12.52 ($16.5).A poll carried out by Ninamedia agency for the Slovenian central bank in December showed 95% of citizens believed they were given enough information about the euro adoption. People polled were mostly worried about price increases as 40% said that is their main concern.” We have seen price increases above the rate of inflation in some restaurants and car parks in our latest survey at the end of December,” said Manca Novinec, a spokeswoman at the Slovenian Consumer Association in an emailed statement.
The Consumer Association has monitored prices of consumer goods since March last year, when the dual display of prices in both currencies started. Price increases are a theme that European Commissioner Joaquin Almunia picked up upon in the EC's statement. „As the Slovenian people start paying and receiving change in euros, I wish to remind them to be careful in the next few days and weeks, and also to watch out for the prices,” he said. (Bloomberg)